EA Announces Workforce Reduction of Approximately 5% and Discontinuation of Certain Videogame Development

Videogame giant Electronic Arts Inc. (EA) has recently announced plans to reduce its workforce by approximately 5% and discontinue the development of certain videogames. The decision comes as part of the company’s efforts to streamline its operations and deliver more immersive experiences for its fans.

In a letter addressed to employees, Chief Executive Andrew Wilson stated that the layoffs will impact around 670 people, which accounts for 5% of EA’s global workforce. With a staff of 13,400 as of last March, this move reflects the company’s commitment to optimizing its resources and focusing on its most promising opportunities.

Wilson also mentioned that EA will be “sunsetting games” and moving away from the development of licensed intellectual properties that they do not deem as likely to succeed in the ever-changing industry. While specific details about the canceled games were not provided, it is worth noting that EA has several major franchises, including Marvel and “Star Wars,” in development. The company is known for popular titles such as the “Madden NFL” football game, “EA Sports FC” soccer game, and the “Apex Legends” franchise.

The decision by EA to reduce its workforce and discontinue certain game development aligns with a broader trend in the videogame and tech industries. Over the past year, numerous companies have implemented layoffs, with over 10,000 jobs cut in 2023 and approximately 8,000 jobs cut so far this year. Just one day before EA’s announcement, Sony slashed around 900 jobs in its PlayStation unit. Microsoft also recently revealed plans to cut around 1,900 workers following its acquisition of Activision Blizzard. Other companies, including Amazon’s Twitch, Unity Software, and Riot Games, have also made similar announcements this year.

While EA’s latest move may raise concerns within the industry, it is essential to consider the broader context. The videogame industry has experienced significant growth in recent years, and companies are continually seeking ways to adapt and thrive in a competitive market. Streamlining operations and focusing on successful franchises, owned intellectual properties, and massive online communities are strategies that can help companies stay relevant and meet the ever-evolving demands of gamers.

Despite the announcement, EA’s stock remained relatively unchanged, reflecting investors’ confidence in the company’s ability to navigate these changes successfully. The stock has seen a modest increase of around 2% year to date and has gained approximately 27% over the past 12 months, outperforming the S&P 500’s 6% rise in 2024 and 28% gain over the same period.

In conclusion, EA’s decision to reduce its workforce by 5% and discontinue certain videogame development reflects the company’s commitment to delivering more immersive experiences for its fans. By streamlining operations and focusing on successful franchises, owned intellectual properties, and online communities, EA aims to position itself for continued success in a rapidly evolving industry. While layoffs have become a common occurrence in the videogame and tech sectors, investors remain optimistic about EA’s future prospects as evidenced by the stability of its stock price.